 Divide
and rule?
The wonder of the 24 May apportionment sessions
For those of you who did not attend the three separate Discussion of
Apportionment meetings held by the agents Knight Frank, on the 24
May 2008, here’s some info which interested us
a) the residents were split into 3 groups by share value and some of
the group for the four shares came to the conclusion that since
there are more units with four shares (about 70%), the en bloc
apportionment should favour this group
b) The agents tabled a hybrid one 50-50 or hybrid two 75-25 means of
apportionment and felt that the 75-25 method was better for most
c) Knight Frank admitted during the third session that under the
current economic scenario they CANNOT achieve even the $1.4b reserve
price now. Since our sources are saying that prices have only
started to plumett, this would mean that by the time we look for a
buyer, the market may even be lower. So for those of you who have
read “Goodbye En bloc Sales” articles in the press and are wondering
why we Clementi Parkians are stoically trying to en bloc in a down
cycle, when prices are now 30% down, we are wondering too. If we are
for a sale, we would ask, why give any advantage to a developer by
selling in a down market?
d) Knight Frank provided a handout showing that i) the per sq ft
rate for sale under their current (not fixed) enbloc scenario is
roughly $1490 - $1900 psf depending on your apartment size BUT ii)
the replacement cost for an apartment in a new development at
present market is about $1700- $2000 psf on average (and the agents
admitted that the figure would be higher in three years). Unless one
goes out, out, out of the area. So there is no advantage to en bloc
if one wants to buy a NEW apartment. And since the old ones are
under risk of en bloc... we wondered what the logic of ANY en bloc
is... The figures on negative replacement cost were clear and this
is out of the mouths of the agents!
SO - If you are wondering why anyone would go enbloc given that
replacement cost for a new apartment may be equal to or exceed what
one would sell Clementi Park for, we are wondering too. Have been
for a long time. For us, it comes under the "why bother" category.
From Horizon Tower to Finland Gardens, they all know. Read the
stories at
www.hope4stayers.com archives, (the new website by united condo
owners against en blocs who call themselves Stayers). In fact, in
some en bloced condos recently in the press, the majorities have
realised too late the high replacement cost and tried to block the
sale after signing on the dotted line.
And, in two or three years, the future psf market prices, compared
to what is quoted in today’s down market for replacement cost units,
may make you fall off your chair. Tide's up at the casinos' then? So
sell low in today's down market and buy high in three years?
Sensible?
And we know that you know - your sales proceeds do not include legal
fees, stamp fees, moving costs and reno costs for the replacement
unit and possibly renting in the interim before your new place is
ready. The shortfall scenario.
Lastly, during the second meeting, one noble resident-Stayer asked -
why would one move to one of those new condos with a dense highly
built-up plot ratio as opposed to staying in Clementi Park with its
space and greenery? His point was, those new developments are so
crowded, small, no privacy. On this point, we are not wondering at
all! Save Clementi Park!
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